Monday, 17 December 2018 11:50

NZ consumers misled over purchases of mobiles, laptops

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New Zealand retailer Noel Leeming Group has been fined NZ$200,000 for misleading consumers about their rights under the Consumer Guarantees Act in relation to the purchase of consumer goods such as mobile phones, laptops and household appliances.

Noel Leeming was convicted on eight charges under the Fair Trading Act, for making false or misleading representations to consumers about their rights under the CGA, following a prosecution by New Zealand's competition enforcement agency, The Commerce Commission.

Each charge relates to a different complainant and the conduct occurred between September 2015 and January 2017 at seven Noel Leeming stores across New Zealand.

“This prosecution related to multiple consumers in multiple locations. It was not isolated or ‘one off’ conduct. Consumers complained to Noel Leeming about products and were entitled to have their complaints treated seriously, investigated properly and remedied where appropriate. Instead they were misled — sometimes repeatedly — about their rights under the law, at a moment when it really mattered to consumers that their legal rights were honoured,” said Commissioner Anna Rawlings.

Consumers were misled about:

  • the right to seek remedies for faulty goods from Noel Leeming rather than the manufacturer;
  • the right to a refund for a faulty product; and
  • the right to a replacement for a faulty product.

In sentencing in the Auckland District Court on Monday, Judge Nicola Mathers said there were “direct and significant departures from the truth in every case … consumers were denied their rights and had real difficulty dealing with Noel Leeming.”

One complainant told the court that he got “disruptions, anxiety, stress, [and] the feeling that I was the bad guy because I was inconveniencing them, making their life harder.”

Noel Leeming made misrepresentations such as that:

  • Claims under the CGA about an iPhone had to be negotiated with Apple directly;
  • The CGA “is not effective for” Noel Leeming, and a consumer was not entitled to a refund despite false representations made about the suitability of a mobile phone;
  • A consumer had to contact Microsoft about a faulty product;
  • Noel Leeming could repair a fridge as many times as it liked; the consumer was also told he could only get a store credit to purchase another fridge; and
  • Mobile phones are only replaced within 14 days, and a new phone could only be obtained if a fault occurs thrice.

“These statements are simply wrong. The CGA entitles consumers to receive a remedy from Noel Leeming, as the supplier. A supplier cannot refuse to deal with its customers and refer them to the manufacturer. The CGA is also clear about the circumstances in which a refund or replacement is available. These statements should not have been made to consumers,” Rawlings said.

Since 2007, the Commission has thrice warned or issued compliance advice to Noel Leeming about potentially misleading consumers of their CGA rights.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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